India’s Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) Has it impacted poverty

In this paper, our objectives are several and we answer questions such as whether the NREGS wages been above their reservation wages; whether NREGA been successful in checking rural-urban migration. Further, we estimate the reservation wages as a function of individual and labor market characteristics. This is also the first study to estimate the reservation wages in the Indian context and compute net benefits from NREGS jobs. Next, we make an attempt to understand what demand-side (individual) and supply-side (program) characteristics determine enrolment in the NREGS program and further, determine the NREGS wages. We find that the wages the beneficiaries got under the NREGS were well below than their asking wage (which was 207), being only `98 on average. We find that NREGS has not had any impact on rural-urban migration, hence presumably has no impact on urban poverty.

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